“Compulsions” determine what the company wants to do to achieve its business objectives. “Constraints” determine how the company achieves the goal of free enterprise. A healthy balance between compulsions (the ‘what’) and constraints (the ‘how’) is necessary for the long-term. However, most business organizations tend to tilt towards their compulsions of target gains, rationalizing that to make an omlette you have to break some eggs.
During the industrial age, many Western companies preferred to locate production and manufacturing plants in nations across the world, attracted by cheap labour and comparatively minimal legislative constraints. The dangers to health and environment were also then, far from home. In India, for example, the holdings of many of these companies survived her Independence, and remained the legacy of colonial times.
Union Carbide had designed a pesticide production plant at its premises located in the heart of Bhopal, a populous city in India. In 1984, the fatal leaking of methyl isocyanate caused the Bhopal Gas Tragedy, which some have also termed the “Hiroshima of the chemical industry”. Twenty thousand men, women and children living in proximity to the plant, died instantly inhaling the gas. With minutes families were decimated. The diffusion of poisoned air into the atmosphere injured three hundred thousand more.
Over 120,000 survivors are left still in need of medical help they cannot afford. Despite calls for humanitarian restitution, Union Carbide and the new owners, Dow Chemicals continue to assert that, further to the minimal compensation they paid in 1989, they have no obligations remaining to the people and the place. Meanwhile thousands of tons of toxic waste lie exposed and untreated on the factory premises even today, nearly 25 years later.
Business houses tend to consider public interest to be inimical to entrepreneurship. Social groups demand constraints on their activities and a proactive giving back to the society that nurtures their enterprise. One side takes ‘bottom line’ to solely mean their profits; the other argues against the exclusion of beneficence to people and planet.
Company awareness of the context of its existence would be “enlightened self-interest”. Cochrane says the process involves the adherence to standards at three levels:
- public policy
- internal standards
- actual performance
Consistency in doing so preserves “integrity”, whereas “inconsistency breeds cynicism”. In the race to get ahead, political and business leaders have often displayed this cynical inconsistency towards others sharing the same sphere. Thus, globalization, which has allowed multinational corporations to achieve dizzy heights of success, has also witnessed rapacious damage to human and other resources.
The point is that in being present in the same space, every entity, group and organization relates to every other. The greater system, the universe, is composed of various subsets - each encircles its own unique constituents of state, corporate, family, or even individual. The subsets exist within this social matrix, relating to the macro (universe) as well as to each micro (organism) through dynamic interfaces that give rise to unique issues and energies between them.
The wholesome growth and development of any one depends on the relationships it forms with the others. The functional interrelationships between the various subsystems (digestive, circulatory, endocrine, etc.) within a living organism are vital to its wellbeing. In the same way, each subset’s contribution to the health of the total system extends its own longevity.
Elkington coined the term ‘triple bottom line’ to explain the evolving new reality. Corporations not only add economic value, they also add or destroy environmental and social value. Change, he predicts, is imminent in the form of a “global cultural revolution”. This revolution, powered by business, will precipitate paradigm shifts in seven important areas: markets, values, transparency, life-cycle technology, partnerships, time and corporate governance.
Altered lines of thinking in both politics and business are pressured by successive waves of public reaction. Elkington observes:
- Wave 1 brought an understanding that environmental impacts and natural resource demands have to be limited…
- Wave 2 brought a wider realization that new kinds of production technologies and new kinds of products are needed…
- Wave 3 focuses on the growing recognition that sustainable development will require profound changes in the governance of corporations and in the whole process of globalization, putting a renewed focus on government and on civil society.
Corporate governance, for instance, is now transitioning from “exclusive” from others to “inclusive” of others, as partnerships become the business mantra of the twenty-first century.
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